Monday, October 31, 2011

Every time I do a post on or by Pat Buchanan, there is some comment about Buchanan's character or his worthiness to be heard. The Belmont Club was loaded with effete Buchanan detractors. Buchanan would be called a racist or an anti-semite. Rarely would he be attacked for the specifics of his opinion or argument. Mostly, his detractors avoid specifics because they have paltry evidence to contradict him. Here is a book review on Buchanan's latest book and his dangerous truths:
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I went to a dealership last weekend to check out an All-American muscle car, but it didn’t turn out to be all-American at all. As listed on the window sticker, the domestic content was only 55 percent. The transmission, one of the most important components on the vehicle - especially for a performance machine - was manufactured in China. On the same day, I dropped into a hardware store to pick up a box of nails, and they were all made in the People’s Republic, too. After a long day of trying to avoid purchasing products made by the communist Chinese, I settled down at home to eat a refreshing fruit cup. When I flipped the plastic container over to check out the nutritional information, there it was in black and white and all capital letters: PRODUCT OF CHINA. The reds had invaded my refrigerator.

Book Cover: Patrick J. Buchanan, Suicide of a Superpower

It doesn’t matter what you want; almost every consumer product on U.S. store shelves is made overseas, especially in China. It doesn’t matter how much you want to find it; almost nothing you need is made in the USA. From expensive manufactured equipment to swank plasma TVs to the simplest munchies for a kid’s lunchbox, that “Product ofChina” label is stamped on it all. Try taking the China Test for a month or two - maybe even a year. Any time you buy anything, flip it over and read the label to see if it was made in the Middle Kingdom. The results of a thorough China Test can be startling: Americans are dependent on the Maoist state for the necessities of life. Obviously, this dynamic cannot work forever. Eventually, a nation needs to produce something it can sell to have the revenue to consume anything - and America is making less all the time.

In his new blockbuster book, “Suicide of a Superpower: Will America Survive to 2025?” Patrick J. Buchanan chronicles the demise of American manufacturing. “From 2000 to 2010, America saw 50,000 factories close and 6 million manufacturing jobs disappear,” he writes. “Manufacturing, 27 percent of the U.S. economy in 1950, is down to 11 percent and accounts for only 9 percent of the non-farm labor force.” This is not only bad for the working class because service jobs pay half as much on average as manufacturing jobs, it is dangerous for national security as well. Military contractors are dependent on parts made abroad, which means America’s ability to project force is tied to foreign suppliers whose interests might not always coincide with our own. “The defense industry has been off-shored,” warned former South Carolina Sen. Fritz Hollings. “Today, we can’t go to war except for the favor of a foreign country.”

There are countless national policies that put U.S. manufacturers at a disadvantage in their own land and chase jobs overseas. Onerous federal taxes on income made abroad mean companies don’t bring cash home which could be invested in creating jobs. House Ways and Means Committee Chairman Dave Camp, Michigan Republican, estimates $1 trillion in U.S. corporate money is sitting in foreign bank accounts to avoid tax penalties here. That’s treasure not going to domestic research-and-development or facilities expansion. Backward labor laws also make it more expensive for the Big Three domestic automobile manufacturers to produce cars in America than foreign firms, which are free to set up in cheaper nonunion southern states without fear of a national strike. On top of all this is the fact that China can break every trade law on the books and nothing is done about it. These are policies of a nation that’s no longer serious about being competitive.

Meanwhile, as millions upon millions of private-sector jobs disappear, the government leviathan continues to grow unabated. In 1960, 8.7 million people worked for the government; today that number has ballooned to 22.5 million. “Between the passage of Obama’s stimulus bill in 2009 and September 2010, millions of private-sector jobs disappeared but 416,000 new government jobs were created,” Mr. Buchanan reports. On average, federal employees earn about $62,000 more per year than workers in the private sector. The burgeoning bureaucracy and all its big-government programs don’t come cheap and have brought the world’s most productive economy to the brink of bankruptcy.

Once the world’s largest creditor, now America is the biggest debtor nation in history. We are running trillion-plus-dollar deficits every year that add to a national debt closing in fast on $15 trillion. A nation is not free when it owes so much because there are strings attached when a foreign power maintains such a large financial stake in another state. Beijing, for example, owns over $1.2 trillion in U.S. debt, which gives it sway over U.S. affairs. The debt jam leads to worry that Washington will either go into default or inflate like crazy to be able to pay off debt with dollars worth much less. Both are options of a seriously diminished economy and will lead to punishing consequences for taxpayers. If liberal Democrats had their way and used revenue increases to balance the budget, taxes on everybody would have to go up by 67 percent.

America’s national crisis is a failure of leadership. Although the country is about to drive over the cliff, our elected representatives have proven incapable of taking action to change directions. We see the problems and understand the crisis but no longer have the will to do what’s right. President Obama has admitted that “At no time in human history has a nation of diminished economic vitality maintained its military and political primacy,” yet his policies have gutted the U.S. economy to its worst condition since the Great Depression. Clare Booth Luce quipped that, “The difference between an optimist and a pessimist is that the pessimist is usually better informed.” Pat Buchanan’s new book provides all the information anyone needs to be pessimistic about the future.

Sunday, October 30, 2011

JUST off the plane from the Buttonwood conference in New York and, as always, it was great to have the chance to hear so many important thinkers speak on a wide variety of issues.

The speech that stuck in my mind was a passionate defence of the US jobs act from Gene Sperling, director of the National Economic Council in the Obama administration. Maybe the reason it caught my attention was that all the passion in this debate tends to come from the deficit-cutting side, but Mr Sperling made a very convincing case that long-term unemployment is a huge crisis.

The current mean period for workers to be unemployed is 40.5 weeks; in the early 1980s recession, it was 21. The longer a worker is unemployed, the harder it is for he or she to get a job; some companies even state that the unemployed need not apply for jobs. This can be terrible news for those at both ends of the age spectrum. Those in their 20s can find that a long spell of unemployment leaves a permanent dent in their lifetime income; those over 55 may find it impossible ever to get work again.

That, argues Mr Sperling, is why some kind of stimulus is needed. Doing nothing is not an option. To those who say that the 2009 stimulus plan failed, he had a convincing rebuttal; when President Obama was elected in November 2008, forecasters were projecting a decline in GDP over two quarters of 1.6%. The actual decline was 7.8%; the economy was in freefall. That output was growing again by late 2009 surely owed something to fiscal stimulus (although monetary policy must have had an impact too).

But what about tackling the deficit? Here Mr Sperling had a key fact which demonstrated why reduction cannot be achieved by spending alone. In 2000, 45 million people were getting social security; by 2020, that figure will be 70 million. Medicare has a similar uplift. Given that background, it is implausible to state that spending can be locked in at 2000 levels; one cannot repeal ageing, as Mr Sperling said. Even if adjustments are made to those programmes (increasing the retirement age, controlling drugs costs), politicians can, at best, slow the rate of spending increase. Taxes will have to be raised.

Typically, however, the other striking speech came from Kyle Bass, the investor, which illustrated the other side of the problem. He pointed out that total global credit rose from $80 trillion in 2000 to $210 trillion today. In many nations, debt is three to four times GDP. These figures have normally been seen only in the course of major wars (i.e 1914-1918 and 1939-1945) when the result was a complete wipeout for creditors of the losing states.

Dealing with this debt is a kind of deadweight on the economy. Yes, every debt is also someone else's asset. But the burden of repaying debt will affect the decisions of consumers, companies and governments while uncertainty over whether they will get repaid will weigh on investors. The euro crisis (which hadn't been solved by this week's deal) illustrates the point.

So that's the key issue. How to deal with an age of deleveraging without blighting the lives of millions of people though long-term unemployment. I am not sure that the conference provided the answer but it did make me think that one should not be too ideological about the issue; to recognise, for example, that America might have more flexibility to deal with the problem (because of its reserve currency status) than Britain or Greece.

Saturday, October 29, 2011

Sheriff Dean Wilson of Del Norte County said he was "ignorant and naïve about the terrible condition our state was in." He came to believe that people were being assaulted by their own government. "I spent a good part of my life enforcing the penal code but not understanding my oath." Wilson and other sheriffs said it is their role to defend the liberties of the people against any encroachments – even if those encroachments come from other branches of government.

I looked at the video posted by DR and added the additional video. The park was a filthy mess, and some of the demonstrators were clearly provocative to the police, but I did not see any violence that would have warranted the firing of tear gas canisters point blank into the small crowd. The police seemed confused and poorly directed. They lacked direction and to my view were unprepared, poorly trained and seemed to have little coordinated supervision.

The politicians did not do their jobs by allowing the setting up of camps in the park in the first place. If nothing else, all American cities have strict laws on littering and loitering. Public demonstration is protected speech, vandalism and squatting is not. The Oakland police did themselves no favors and the demonstrators hardly rose to the level of a dangerous the mob. Youtube will sort it out.

Friday, October 28, 2011

DOWNTOWN • The keepers of baseball history were waiting for David Freese shortly after he made it Thursday night at Busch Stadium.

The Cardinals' third baseman slugged a game-winning home run in the 11th inning of Game 6 to force the World Series to a winner-take-all Game 7 on Friday at Busch Stadium. Freese had two of the most pivotal hits (so far) in the Cardinals' season, as he went down to his final strike before delivering a game-tying triple in the ninth inning and then hit the clout that won the game, 10-9, in the 11th.
His teammates were there at home plate to to greet him and, in the language of the realm, "shred" him.

That is: Tear the very jersey from his shoulders.
What's left of the jersey is headed to Cooperstown.
Representatives from the National Baseball Hall of Fame in Cooperstown, N.Y., met Freese shortly after he came off the field and were able to acquire the bat he used to hit the homer and the tattered remains of the jersey he wore. The Hall reps left the ballpark with both items in their possession.

The jersey is torn because of the "shredding" practice that the Cardinals have adopted for some late-season celebrations. The "Shredder" is the nickname given to Nick Punto, who this season has gone up to teammates, grabbed them by the top button of their dresse shirts and yanking. The result is a spectacularly explosion of buttons, collars, and thread -- or a "shred."

Now, the shredded is going to the Hall of Fame to represent this game, easily the most compelling (best?) in Busch Stadium III's short history.

Thursday, October 27, 2011

Whatever action its politicians do or don’t take this week, the US is already bust, writes Jeff Randall.TELEGRAPH

Without a deal to raise the country’s $14.3 trillion debt ceiling, the US will default on August 2.

It has come to this: the world’s biggest economy, head of the triple-A club and home of the financial system’s reserve currency, can pay its bills only if it borrows more money. America needs to increase its credit limit by $2.5 trillion simply to get through to next year’s presidential election.

Billions, trillions, schmillions, chill out, why fret over a few more zeros? Well, for context, America’s 2011 GDP (annual output) will be the same as its “official” debt, $14 trillion to $15 trillion.

This doesn’t tell the whole story. The good news is that $4.6 trillion of America’s debt is accounted for by intra-government loans, money the US owes itself. The bad news is that on top of the $9.7 trillion Washington must repay to outside investors ($1.1 trillion to China), it has $60 trillion of unfunded social security and Medicare obligations, ie, welfare pledges to its own citizens for which there is no pot of savings, only the taxes of future generations.

As Dolly Parton nearly said, it cost a lot of money to sink this deep. America’s commercial and military hegemony came at a terrifyingly high price.

In 1835, US federal debt was zero; the country owed nothing. Two centuries later, having become the richest and most powerful nation on earth, America is, quite literally, running out of cash. The problem was explained by Addison Wiggin and Bill Bonner in their best-seller Empire of Debt: not many people can afford to live like Americans; the trouble is, neither can they.

Last year, the difference between what the US paid for imports and received from exports was almost $500 billion. This year, the trade gap with China alone is running at $25 billion a month. As a result of ambitious welfare programmes and military adventures, the Obama administration is running a budget deficit of $1.3 trillion.
According to Warren Buffett, America’s most successful investor, the country has “relied on the labour of others to provide things that can be used every day… this can continue for a long time and on a large scale – but not forever”.
There speaks the voice of common sense. On the other side of the hospital screens, we have media dons, Princeton’s Paul Krugman and British-born David Blanchflower, professor of economics at Dartmouth College, championing fiscal incontinence as the route to salvation.

Aside from their links with Ivy League universities, Krugman and Blanchflower have something else in common: they both admire Gordon Brown, who clocked up £160bn of budget deficits in the boom years of 2003-07. At the core of their thinking, and his, is an unshakeable belief that government spending sparks growth, which is the sine qua non of life, liberty and happiness – and also debt reduction.

But hang on a minute, how come Greece required two multi-billion-euro rescue packages? Did the Greeks economise themselves into penury? Were they guilty of criminal parsimony? Or was it that, thanks to its fraudulent entry into the euro, Athens was able to borrow recklessly, allowing vote-crazed leaders to bribe the electorate with money the country did not have and could never afford? Ah, say the professional spendthrifts, the US is not like Greece. True, it is vastly bigger and so are its debts – and they’re not going away.

A study by Harvard professor Kenneth Rogoff and Carmen Reinhart from the Peterson Institute shows that when public debt tops 90 per cent of GDP it acts as a brake on growth. Their study of 44 countries, going back 200 years, concludes that it would be foolish to interpret today’s low borrowing costs as a green light for further debt. “Politicians everywhere like to argue that their country will expand its way out of debt, [but] our research suggests growth alone is rarely enough to achieve that with the debt levels we have today.”

Boston University’s Professor Laurence Kotlikoff goes further: America is already bankrupt. Writing for Bloomberg, he explained that US debt is much greater than has been declared: “Congress has been very careful… to label most of its liabilities as 'unoffical’ to keep them off the books and far into the future… This is what happens when you run a massive Ponzi scheme for six decades straight, taking ever larger resources from the young and giving them to the old while promising the young their eventual turn at passing the generational buck.”
Ponzi schemes survive as long as they are able to attract increasingly bigger contributions from ever more participants. Eventually they collapse under the burden of impossibility. This is where America is heading. It is beyond the point at which it can cut benefits or raise taxes sharply enough to prevent exponential debt growth.
If Democrats and Republicans can cobble together a compromise this week – and the markets still give them the benefit of the doubt – their fix will be nothing more than crisis deferral. Capitol Hill is in the business of Micawberism. What price the Fed resorts again to printing money?

Wednesday, October 26, 2011

Robert Fisk: Assad's army remains defiant as it buries its dead
Syrian officers told me 1,150 soldiers have been killed in Syria in the past seven months - an extraordinary death toll

Robert Fisk INDEPENDENT
Wednesday, 26 October 2011

Sergeant Jassem Abdul-Raheem Shehadi and Private Ahmed Khalaf Adalli of the Syrian Army were sent to their graves yesterday with the send-off their families would have wished for; coffins draped with the Syrian flag, trumpets and drums and wreaths held by their comrades, and the presence of their commanding officer.

There was a Last Post, Chopin's funeral march – mixed with ululating staff at the Tishreen Hospital to which their remains had been transferred – and then the nine-hour journey by ambulance to their hometown, Raka. Shehadi was 19, Adalli was 20. And their uncles swore they had died for President Bashar al-Assad.

They were shot dead in Deraa – by snipers, according to their commanding officer, Major Walid Hatim. "By terrorists," he said several times. Assad's opponents might have no sympathy with these dead soldiers – nor Amnesty, nor Human Rights Watch, nor the United Nations, who say 3,000 civilians have been killed by Syrian security forces, nor the Americans, nor the British et al – but those two coffins suggested that there is more than one story to the Syrian Revolution. Syrian officers told me yesterday that 1,150 soldiers have been killed in Syria in the past seven months, an extraordinary death toll for regular Syrian troops if correct. On Zawi mountain near Idlib, Major Hatim said, 30 Syrian soldiers had been killed in an ambush. Mazjera was the word he used. A massacre.

Shehadi and Adalli were based in Deraa, where the opposition to Assad began. Shehadi was there for six months, Adalli for four. It was a sign of the times that Major Hatim arrived at the Damascus funeral in civilian clothes. Why was he not wearing his uniform, I asked? "It is easier," he replied. Because of the dangers driving from Deraa? "Maybe," he replied. That, too, told its own story. Both the dead soldiers had lost their fathers years ago and their two uncles had travelled here from Raka to escort the bodies home. They were from poor families, they said. The boys and their uncles had been looking after their mothers.

Shehadi's uncle, Salim Abdullah, in a brown abaya and drawing heavily on a cigarette, was on the edge of tears. "My nephew had three brothers and two sisters, and they are very poor," he said. "His mother Arash will now have to be looked after by us. Those killers have killed the hope of our family. He was the youngest boy."

Behind Salim Shehadi, Syrian troops stood in full battledress as the coffins were brought from the hospital mortuary. All Syria's military dead leave from the gloomy portals of the Tishreen Hospital, a vast concrete building in the suburbs of Damascus. Even the ambulance driver prostrated himself in tears over his vehicle.

Syrian television had a crew at the hospital, along with the ever loyal Syrian Arab News Agency, but it was highly unusual for a foreign reporter to be invited to this ceremony, let alone to speak to Syrian officers. Major Hatim explained to me that the two soldiers were killed in a planned ambush; the sniper was firing from between two houses. There was a strange confluence in this description. Opponents of Assad often claim that it is they that are fired on by snipers using the cover of buildings.

But few people in Syria now doubt that, however peaceful – and yet bloody – the anti-government demonstrations in Homs and Hama are, the Syrian Army has become a major target. Needless to say, Major Hatim, a 25-year army veteran, was also a supporter of the President.

Hatim talked of Syria's "resistance" on the part of the Palestinians, that soldiers sometimes had to die for their country, that their enemy is Israel. There is much talk in Damascus of a "foreign hand" behind the killings in Syria, although the Major admitted that, in this case, "unfortunately the killers are Syrian".

But Salim Shehadi wanted to say more. "I hope you will be honest and tell the truth," he said. "Tell the truth about the killing of Syrian people. The hand of terrorists took my nephew. We are all ready to be martyred for Syria and for our President Assad." It sounded too pat, this little speech from a grieving man, and a reporter must ask if this was a set-up. Yet the military had only four minutes before I arrived for the funeral, and I doubt if they could have coaxed this poor man to say these words.

Perhaps, up in distant Raka, they believe these words of loyalty – Abdullah Hilmi, Adalli's uncle, an older man in a brown robe, said much the same – and certainly Major Hatim believed what he said. But what of those YouTube pictures, of the shooting of demonstrators and mourners at funerals – no danger of that at this funeral yesterday – and the 3,000 civilian dead of which the UN now talks?

I suppose that, until we Western journalists can investigate without government restrictions, it's a YouTube picture against the word of two poor men in peasants' clothes.

Losing the Economic Battle

The global debt apocalypse approaches.

On the issue of public debt, Washington is experiencing what psychologists call “learned helplessness.” The financial news is so relentlessly terrible that people have become numb to it and assume nothing can be done to regain control over our fate.

Today the world’s public and private debt exceeds an incredible 300 percent of GDP. We are at risk of succumbing to an ugly, downward, global mark-to-market in asset prices. Yet the discussion in Washington fails to reflect the immensity of the threat.

Some money managers have a theory that this mark-to-market process has been under way for some time. Stage One was the 1990s Asian crisis. Global financial markets concluded that Asia’s debt was dangerously high and its banks’ balance sheets not reflective of reality. Global traders pounced. Interest rates soared, equity markets plummeted, banks failed, and currencies collapsed.

Stage Two is happening in Europe today.

Stage Three will eventually hit the United States. Washington policy-makers seem confident America’s public debt risk is years away. They believe that the U.S. economy, with the dollar the reserve currency, enjoys some immunity from these concerns. The central bank, moreover, can buy bonds to keep interest rates from rising in response to growing debt. Yet these are risky assumptions.A year ago, senior European officials never dreamed they’d be in their current mess. Greece represents only 3 percent of the Eurozone economy. Bailout tricks and clever central bank interventions were supposed to calm nervous markets. That happened, but didn’t last. A powerful global financial market brought officials to their knees. Today, many European policymakers can’t believe America is risking a similar outcome. True, as a means of protection the Fed itself will try to manipulate credit markets by keeping long-term interest rates artificially low. But global financial markets will simply penalize bank stocks, a phenomenon that may result in a credit contraction and double dip recession.

The larger danger is that ballooning debt reaches a tipping point beyond which financial markets conclude the debt cannot be repaid without instigating political chaos. That is Europe’s predicament today. Markets realize that the austerity policies needed to bring the debt under control are making the task of debt reduction impossible, as tax revenues plummet.

Some analysts, including Criton Zoakos, argue that the global economy has reached a “point of no return.” Debt suffocates growth, which destroys equity values (particularly financial stocks), which diminishes lending, investment, and consumption. Falling tax receipts lead to even more debt. Optimists argue not to worry. The world since January 2008, they say, has been undergoing an important period of public and private deleveraging. Growth will resume once deleveraging is completed.

If only life werethat simple! Global indebtedness, according to Zoakos, has actually increased by 17 percent since the beginning of 2008. Nations have enacted generous bailout and stimulus programs while growth has averaged an anemic 1.2 percent.

With the world having fallen into a giant liquidity trap, monetary policy has been ineffective. Because of the growing slack in the economy as the developing world joins in the global slowdown, the central bankers couldn’t inflate their way out of today’s debt problem through bond purchases even if they wanted to.

What the Greek situation has shown (debt 120 percent of GDP before the crisis and 170 percent todayafter reforms) is that austerity without a strategy for vigorous economic growth is a recipe for failure. But Washington’s political environment is so poisonous, bipartisan fiscal compromise seems impossible.

Washington is overflowing with tax reform policies, proposals to bend the cost curve of entitlements, and ideas for smart infrastructure spending. There even seems to be a beneath-the-surface bipartisan consensus to move forward on these items, which probably won’t happen short of a stock market crisis that forces Congress to act.

Yet these reforms may not be enough. Policymakers also need to reform today’s slow-to-lend, too-big-to-fail banks. Here’s an important question: Should governments and central bankscontinue to try to prop up the value of the assets on bank balance sheets even though those values are unsustainable? This losing battle has already contributed to global public debt-to-GDP ratios that boggle the mind. We may be saving our banks, but we’re losing our economy.

Like a giant bow wave building up on each side of the vessel, the growing debt is threatening to swamp the entire world economic ship. A feeling of helplessness has taken hold at the precise moment policymakers need to be audacious. The numbers behind presidential candidate Herman Cain’s 9-9-9 plan may not add up, but his gut instinct is on the mark. America needs radical reform on the issues of both growth and debt.

David M. Smick, chairman of the macroeconomic advisory firm Johnson Smick International, is the founder and editor of the International Economy magazine.

There is understandable nervousness about recent changes in Libya and in the Middle East. Today, the most successful Middle Eastern country is Turkey. Turkey is evolving and reputed to be making changes that will take it in a more Islamic direction. It that true? What will be the Turkish influence? If you can find the time and interest, the second video, "Empire: The New Ottomans?" is as good an analysis as I have seen. The discussion about current social changes within and outside of Turkey occurs at the 22 minute mark. Syria, Libya, the Kurds and Israel are all reviewed.
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Libya seeks to calm Sharia fears
(UKPA) – 1 hour ago

The head of Libya's transitional government tried to reassure Western powers which helped topple Muammar Gaddafi that the country's new leaders were moderate Muslims, after a speech that emphasised the Islamisation of Libya.
Just as in neighbouring Tunisia and Egypt, Islamists have emerged from yet another Arab Spring uprising as the most powerful group in the country. How far they will go will be decided at the ballot box - in Tunisia this week, in Egypt in November and in Libya within eight months.
National Transitional Council leader Mustafa Abdul-Jalil said on Sunday that Islamic Sharia law would be the main source of legislation, that laws contradicting its tenets would be nullified, and that polygamy would be legalised.
"I would like to assure the international community that we as Libyans are moderate Muslims," said Mr Abdul-Jalil, who added that he was dismayed by the focus abroad on his comments on polygamy.
A US State Department spokeswoman said America was encouraged that he had clarified his earlier statement.
The stir created by Mr Abdul-Jalil's address in Benghazi, the eastern Libyan city where the anti-Gaddafi uprising was born in mid-February, came as international pressure mounted on him to investigate the circumstances of Gaddafi's death.
Abdul-Jalil ordered an inquiry to establish whether the deposed Libyan leader was killed after being captured alive last Thursday by fighters in his home town of Sirte, or whether he died in the crossfire as the government has suggested.
Meanwhile, the bodies of Gaddafi, his son Muatassim and his former defence minister Abu Bakr Younis were moved from a commercial freezer in a warehouse area of Misrata in anticipation of burial, a security guard said.
Local military spokesman Ibrahim Beitalmal has said the burial is likely to take place later.
He said the three men would be interred in unmarked graves in a secret location to avoid vandalism. Asked about the removal of the bodies from the freezer, he said he was unaware of the process of burial getting under way.

According to a report from the European Commission, the European Central Bank, and the International Monetary Fund, EU leaders need to reorganize Greece's financial rescue measures to stop a downward spiral.

The collective report from the European Commission, the European Central Bank (ECB), and the International Monetary Fund (IMF), known as the troika, which was first shown to EU finance ministers and has now been revealed to the heads of state, reveals a true tragedy.

Greece will need further financial assistance from the international community for another 10 years before the country can start raising money again on the financial markets. Originally, Greece was supposed to be back on track by 2013. The troika estimates that the financial needs of Greece in the next decade will be in the region of 252 billion euros ($351 billion). That's in addition to the 110 billion euro bailout that has mostly been distributed since its approval in 2010.

In July, European leaders approved a second bailout of 109 billion euros. Around half of that amount is being covered by private creditors. To achieve this, private and state-owned banks are set to forfeit around 21 percent of the money they are owed from government bonds.

Debt relief in sight

Since this will likely not be enough to make a long-lasting impact on Greece's debt, eurozone countries are calling on banks and other creditors to pull their weight even more. Debt relief of 50 to 60 percent is now being discussed, and negotiations are under way with the banks.

If approved, the second Greek bailout would need to be raised from 109 to 114 billion euros.

German Chancellor Angela Merkel says that "Greece must be placed on a new foundation." Other European countries - with Spain and Italy being implied - must also be protected in this way.

The troika also said that despite the painful austerity measures and drastic tax hikes, the state of Greece's public finances has not improved. The deficit will remain at about 10 percent this year. Economic performance is collapsing, and many economists are warning that Greece is "saving itself to death." As economic performance continues to spiral downward, income from taxes sinks right along with it, while more unemployment benefits are paid out.

That's why it is becoming more and more difficult for Greece to get a handle on its debt, and why no investor has any interest in Greek government bonds. It's a vicious circle, and Greece is searching for a way out.

Next installment released

Despite the dire prognosis from the troika, eurozone finance ministers have decided to release the next 8 billion euro-installment of Greece's bailout package. Even the head of the IMF, Christine Lagarde, who took part in the negotiations in Brussels, gave her approval.

Releasing the funds stands in contrast to the previous position of the finance ministers, who only wanted to pay when Greece's debt sustainability had been proven. But according to EU diplomats, the remaining 16 eurozone finance ministers didn't have much of a choice. Had they not released the money, Greek Finance Minister Evangelos Venezelos would have run out of money to pay police officers and teachers before Christmas. The eight billion euros should last until at least the end of the year.

'Not just a Greek crisis'

In Brussels, Greek Prime Minister Giorgos Papandreou said the Greeks are a proud people who expect respect for their drastic austerity measures.

"Greece has shown time and again, that we can make the necessary decisions to make our economy more sustainable and in line with the rules," he said. "This has proven to be a European crisis, not just a Greek one."

However, since Greece was the initiator of the European debt crisis, the Germans are arguing that the country should be placed under permanent monitoring by the troika. The quarterly visits for check-ups on Greece's finances cause too much disquiet and media interest. A better solution, argues Germany, would be a continual and therefore more subtle monitoring of Greece's budget.

It is already clear that even trimming Greece's public debts by 50 percent would only reduce the problems, not solve them. Debt relief, together with a bailout package, would reduce Greece's total debt from 160 percent today to 120 percent in 10 years, according to calculations from the EU.

That would still be twice as much debt as is actually allowed under EU agreements. The troika's report, according to one participant of the negotiations in Brussels, was a beneficial shock that showed everyone involved how critical it is that decisions are made.

Sunday, October 23, 2011

"If your stance on the War on Drugs is because of ethical reasons. Then the more so you should be against it. Why? because the more you should be responsible for your own life and those of your kids. Don't delegate that responsibility to the US Government. Be responsible yourself, for ethical reasons." - Giancarlo Ibarguen

Most of the cocaine shipped north from Central and South America these days travels through Guatemala and into Mexico before eventually crossing the border to the United States. The value of that cocaine, even before it enters the US market, is approximately $40 billion a year. That's nearly the size of Guatemala's entire economy.

The drug cartels in Guatemala act with impunity and effectively control much of the country. As Guatemala's President Alvaro Colom recently told Al Jazeera, "The drug traffickers are much better armed and financed than our military and our government." Guatemala, as a result, has become a very dangerous place to live.

What's the solution? According to Giancarlo Ibarguen, president of the Universidad Francisco Marroquin, the US government should end its war on drugs. REASON

Saturday, October 22, 2011

Gaddafi's death breached the law, says Russia

As politicians in Western capitals were taking quiet pleasure in the capture and killing of Colonel Muammar Gaddafi yesterday, opinions elsewhere were divided.

In Moscow, Foreign Minister Sergei Lavrov said that the Geneva Conventions had been breached with the killing of Colonel Gaddafi.

"We have to lean on facts and international laws," Mr Lavrov said. "They say that a captured participant of an armed conflict should be treated in a certain way. And in any case, a prisoner of war should not be killed."

Russia has been critical of Nato military action in Libya, saying that it has gone well beyond the stated mission of saving civilian life. The main concern for Moscow now is whether the new Libyan authorities will honour contracts signed by the Gaddafi regime. As well as the oil and arms trade, Russian Railways had secured a £2bn contract to construct a railway line between Sirte and Benghazi. Moscow recognised the National Transitional Council as the official government of Libya last month and said it expected all existing contracts to be honoured.

China, which like Russia abstained in the Security Council vote on whether to use force against Colonel Gaddafi's troops, was quicker yesterday to change its tune. Beijing initially refused to support the rebels and had been highly critical of the bombing campaign. But as realities on the ground altered, in recent weeks the Chinese government had started to engage with the rebel movement.

"A new page has been turned in the history of Libya," a foreign ministry spokeswoman, Jiang Yu, said yesterday. "We hope Libya will rapidly embark on an inclusive political process ... and allow the people to live in peace and happiness," she said.

A sign of the official policy change could be discerned in the language that Chinese state media used to refer to Colonel Gaddafi. Newspapers and agencies run by the state, which had previously referred to a "Middle East strongman", had yesterday made a small but significant change to their phrasing, calling him a "madman" instead.

Reaction from other enemies of the US was varied. Venezuelan President Hugo Chavez described the dead dictator as a "martyr", while Iran's foreign ministry tried to banish any parallels between the Libyan revolution and anti-government protests at home. "Despots and oppressors throughout history have no fate other than destruction and death," a spokesman said. He called Colonel Gaddafi's killing a "great victory" but added that all foreign forces must now pull out of the country.

And the eccentric Russian politician Kirsan Ilyumzhinov, who is also the head of the World Chess Federation, said that Colonel Gaddafi's death was a "tragedy" but that he died as a martyr and would be reincarnated.

Mr Ilyumzhinov made a surreal mission to Tripoli in June, where he met with Colonel Gaddafi as an unofficial mediator and played a game of chess with him. Yesterday, he said in a Russian newspaper interview that he had spoken to the Libyan leader numerous times on the phone since. He claimed that Colonel Gaddafi had not been scared of death: "Not a bit! He believed in reincarnation."

Friday, October 21, 2011

One of Teresita's "mosques" was bombed yesterday using surgical strike capabilities developed by Israelis. There were no complications and post-op pain is minimal.

In other news:

Hertz has sent termination letters to 25 drivers at Seattle-Tacoma International Airport after they refused to agree to clock out for daily breaks, during which they normally pray. The workers — all Somali Muslims — were among 34 employees suspended Sept. 30 for failing to clock out before breaks.

With the approval of the Obama administration, an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland...

AP: Only 37% Back Occupy Wall Street Protests... The Occupy Wall Street loons have apparently grown tired of defecating on NYPD police cars. Now they are defecating on the doorsteps of people’s homes according to the New York post.

The White House on Thursday defended Biden’s rhetoric that more Americans will be raped and killed if Republican lawmakers reject part of President Obama’s jobs bill.

Jon Bon Jovi opens doors to his pay-what-you-can restaurant.

Russia: "Killing Gaddafi is against the Geneva Convention." (I guess the Geneva Convention didn't apply to Russia when they attacked Georgia and Chechnya)

Gallup says only Carter had a lower approval rating than Obama at this point in presidency.

Thursday, October 20, 2011

The Netherlands is one of the world's best tax havens for multinational companies. Boeing, US Steel, Walt Disney, Johnny Walker, the Rolling Stones and U2: they all have one thing in common. They don't come from the Netherlands but they pay taxes here. The Dutch treasury earns milions of euros from these multinationals seeking a safe haven to avoid paying higher taxes in their own country.

Addicted to tax havens:The secret life of the FTSE 100
October 2011

The full extent to which FTSE 100 companies use tax havens has, for the first time, been compiled, analysed and published in an accessible and searchable format by ActionAid.

Of the 100 biggest groups listed on the London Stock Exchange, 98 use tax havens. ActionAid’s research shows just how embedded the use of tax havens is in the structures of nearly all Britain’s biggest companies.

The findings are of particular concern because many FTSE 100 groups are set to benefit from plans currently under consideration by the Treasury to give multinational companies using tax havens an £840 million tax break, by relaxing the very rules designed to prevent tax-haven abuse.

An expanded tax revenue base in developing countries is the only sustainable source of funding for governments to invest in reducing poverty and inequality. It means that they don’t need to depend on aid and can achieve self-reliance. Yet, the OECD estimates that developing countries lose almost three times more to tax havens than all the aid they receive each year.

Spent effectively, this sum would easily be sufficient to achieve the Millennium Development Goals.

Corporate tax avoidance, one of the main reasons companies use tax havens, has a massive impact on developing and developed countries alike. The lack of transparency makes it difficult for developing country tax authorities to identify and collect taxes owed by global companies operating in their countries.
With this in mind, ActionAid’s research raises serious questions about many of Britain’s best known businesses. How has the use of tax havens reached such epidemic levels? What is the impact on the UK exchequer, the stability of the international financial system and the ability of developing countries to raise tax revenues to invest in reducing poverty? Link Here

These bi-partisan clowns in Washington just don't get anything right. If you are going to invite foreigners to purchase a home for over five hundred thousand dollars and are offering them a visa, why not a work permit? The visa snd permit could be tied to the length of ownership and not an arbitrary three years. After all, isn't the idea to clear vacant houses and heaven forbid create some jobs.

WASHINGTON (MarketWatch) -- Two senators are preparing to roll out a bill that would give residence visas to foreigners that spend at least $500,000 to buy homes in the U.S. The bill, to be introduced Thursday by Utah Republican Mike Lee and New York Democrat Charles Schumer, would grant a three-year residence visa but wouldn't authorize the resident to work in the United States. The measure is part of a broader immigration package to be introduced by the two senators.

NATO and the US state department said it cannot confirm the reports of Gaddafi's death. Meanwhile in Benghazi, crowds gathered in the streets to start celebrating the reports of Gaddafi's death. - Aljazeera

Tuesday, October 18, 2011

As Kate mentioned below, the Wall Street Journal’s Steve Moore, who helped design Herman Cain’s 9-9-9 tax plan, is having second thoughts about political viability of the national sales tax aspect of the plan and has recommended a 9 percent payroll tax to replace it.

In an interview with National Review Online, Moore explains that he has “come to the conclusion that a national sales tax is just a nonstarter,” politically. While he wasn’t expecting such a hostile reaction to the idea, Moore concedes that “people are naturally suspicious of a new tax.”

Cain’s current plan would eliminate the payroll tax altogether, and he often touts this as a selling point. However, enthusiasm over the elimination of an existing tax has been overshadowed by concern over the prospect of creating an entirely new revenue source for the federal government. Indeed, as Cain’s poll numbers have continued to rise and other candidates have begun to target him, the “new tax” argument has been a favorite line of attack.

Moore recommends as easy fix — set the payroll tax at 9 percent across the board (a reduction from current levels), while eliminating the existing cap on the amount of income from wages that can be taxed. Moore estimates that this new version of the plan would raise “roughly the same amount” of revenue as the current one, and argues that Cain would be “well-advised” to make the change. It is simply a matter of being “better off with the devil we know than the devil we don’t know.”

That’s not to say that Moore no longer likes the 9-9-9 plan in its current form. “I’d take a national sales tax if gets [income-tax] rates down to nine percent,” he says. “But there are some very real objections out there.”

Moore acknowledges that despite the criticism from other Republicans, Cain has been a capable defender of the plan its current form. And while he doesn’t expect to see the candidate announce any changes in tonight’s debate, Moore thinks the transition could be relatively smooth. “Is it a capitulation? No. It’s just a strategic change,” he says.

“Republican voters want to blow up the current tax system and start over, and Herman Cain is one of the few who proposed doing that,” Moore says. “He has the boldest plan out there right now.”

HERMAN CAIN is riding high in the polls. Among other things, his ascent is based upon a charming sense of humour, rousing oratorical skills, a story of moderate achievement in business, zero experience in elected office, which has allowed him to mould a perfectly zeitgest-matching conservative platform untainted by a record of no-longer zeitgest-matching political decisions, and, finally, the bold, clear proposition of the 9-9-9 tax plan. Now that Mr Cain is having a moment in the sun, what had seemed a gimmicky ploy is undergoing serious scrutiny, and we can expect Mr Cain to get hammered on the details of the 9-9-9 plan in tomorrow night's Republican debate.

Mr Cain touts the simplicity of the 9-9-9 plan, but it is anything but simple. Even after reading about it on Mr Cain's campaign site, I'm still not sure I understand it. I thought I knew that the plan proposed 9% income, sales, and corporate tax rates. But the corporate tax is not a simple reduction in the corporate tax rate, as I had thought, but a value-added-tax on "Gross income less all purchases from other U.S. located businesses, all capital investment, and net exports." Anyway, the 9-9-9 plan is not what Mr Cain ultimately has in mind for American tax policy. It is but the first step of a two-step process to replace most federal taxes with a 30% national sales tax, a version of the so-called "Fair Tax". Why not go directly to the Fair Tax, then? Why the transitional step? Mr Cain's statement doesn't really say, though it does seem to imply that the Fair Tax is at present too unpopular to implement. "Amidst a backdrop of the economic renewal created by the 9-9-9 Plan," Mr Cain says "I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax."

Mike Huckabee, a Fox News presenter and former governor of Arkansas, plumped for the Fair Tax during the 2008 race for the Republican nomination and the plan came in for a lot of abuse by economists and commentators across the ideological continuum. Perhaps Mr Huckabee's failure to get far with the Fair Tax explains Mr Cain's choice to campaign on an altogether different tax plan. Perhaps the idea is that he can capture the allegiance of the Fair Tax's many conservative fans while ducking the criticisms of the Fair Tax by pushing a fresh plan with a catchy name implying super-low rates. But this can only work if (a) the media and Mr Cain's competition let him get away with advocating the Fair Tax while running on his transitional plan, and (b) the transitional plan stands up to scrutiny better than the Fair Tax has. And this seems unlikely.

This tripartite scheme makes for a succinct slogan but has little else to recommend it. In particular Cain’s inability to choose between a sales tax and a VAT is puzzling. The two are very similar in their economic effects. The chief advantage of the sales tax over a VAT is that the latter is considered easier for governments to raise, because it is hidden. The chief advantage of the VAT over the sales tax is that it is easier to enforce without stimulating black markets. (Another is that it reduces the risk of taxing business-to-business purchases.) Opting for both as a transitional step means courting the danger of a VAT with none of its rewards: In the first stage, the government would get a new money machine, and in the second it would supposedly destroy that machine and opt for something hard to enforce.The two-stage scheme is self-defeating in another respect as well. The 30 percent national sales tax, whatever its other merits, would be significantly softer on the poor than the 9-9-9 transitional step, since the larger sales tax includes a “prebate” check to all Americans to exempt the basic necessities of life from being taxed, while 9-9-9 includes no similar provision. Leaving aside whether a major tax increase on people at the bottom of the income scale is a good idea, what is the point of first raising their taxes and then cutting them?

In the last debate, only Rick Santorum noted that Mr Cain's plan involves the danger of even temporarily handing the government "a new money machine", a point one would expect to resonate with conservative voters. I expect we'll hear a lot more of this line of argument in upcoming debates. More generally, the fact that Mr Cain apparently believes it is politically feasible to wipe out the entire status-quo federal tax system in order to move to the 9-9-9 scheme, and then wipe out the entire 9-9-9 scheme in order move to a 30% national sales tax seems to me to draw attention to Mr Cain's policy inexperience and dazzling political naivete.

That the 9-9-9 plan would cut taxes on the rich while raising them on the poor led Bruce Bartlett to call the proposal "a distributional monstrosity", a phrase you could imagine Barack Obama using to good effect in a general election. Why would you propose to raise taxes on the poor, making yourself vulnerable to charges of monstrous callousness, when, as the NR editors note, your ultimate plan would only cut them later? Well, you wouldn't, if you knew what you were doing. It requires only superficial examination to see that Mr Cain's 9-9-9/Fair Tax scheme is more an ill-considered, hand-waving improvisation than a serious plan from a serious policymaker. He's winging it, which I supposed makes it all the more impressive that he's been able to wing it all the way to preeminence in a few polls. But now he's made himself a target, and an easy one at that, so I doubt Mr Cain will wing it all the way to the nomination.

Monday, October 17, 2011

Students in a Texas public high school were made to stand up and recite the Mexican national anthem and Mexican pledge of allegiance as part of a Spanish class assignment, but the school district maintains there was nothing wrong with the lesson.

It happened last month in an intermediate Spanish class at Achieve Early College High School in McAllen, Texas — a city located about 10 miles from the U.S.-Mexico border.

Wearing red, white and green, students had to memorize the Mexican anthem and pledge and stand up and recite them in individually in front of the class.

That didn’t go over well with sophomore Brenda Brinsdon. The 15-year-old sat down and refused to participate. She also caught it all on video:

“I just thought it was out of hand, I didn’t think it was right,” she told The Blaze. “Reciting pledges to Mexico and being loyal to it has nothing to do with learning Spanish.”

She said she was particularly offended because the presentations in teacher Reyna Santos’s class took place during “Freedom Week,” the week after the 10th anniversary of the Sept. 11 terror attacks, and on U.S. Constitution Day — the same day as Mexico’s Independence Day.

“Why are we doing their independence when it‘s Freedom Week and it’s also Constitution Day?” Brinsdon said.

Brinsdon said she complained to the school principal, Yvette Cavazo, who told her it was part of the curriculum and that she should participate. Her father, William, also got involved, calling the school district superintendent to complain.

When Brenda made clear she would not stand up and recite the pledge, she was given an alternative assignment: an essay on the history of the Mexican revolution.

Meanwhile, other students continued with their presentations, which took place over the course of several days.

When Brinsdon talked to Santos — a first-year teacher at Achieve — about her new assignment, the teacher told her she grew up in Mexico.

“She told me that she loved Mexico,” Brinsdon said.

School district spokesman Mark May defended the presentations, saying it’s a state requirement for upper-level language classes to teach about foreign culture.

According to the state’s Texas Essential Knowledge and Skills standards, students are expected to gain “knowledge and understanding” of other cultures and use the language to demonstrate understanding of different practices and perspectives. There are no specific requirements about learning to recite pledges or anthems.

May said it’s up to the teacher how to interpret and teach the standards.

“It wasn’t required to pledge loyalty and renounce the U.S., they were simply spreading the culture of another country,” May told The Blaze. “In my mind it’s no different from memorizing a poem or memorizing a passage from Shakespeare.”

William Brinsdon took issue with that notion, saying if that’s the case it cheapens the pledge.

“You‘re taking their allegiance and their oath from Mexico and cheapening it just as a grade or words don’t mean anything,” he said.

May reiterated that the lesson was all done within the context of meeting the state requirements, and that the school did its duty providing Brenda with an alternative assignment when she objected.

“The students came away with a better understanding of the culture, heritage and customs of a neighboring country where Spanish is the primary language,” he said.

May added that the lesson was “well received” by other students and parents.

“There’s always going to be people that always feel a little bit differently,” May said.

William Brinsdon is still having a hard time fathoming the idea of reciting foreign pledges and anthems in a U.S. public school in the first place.

“Our kids don’t even know the [American] national anthem and here we are…teaching them to memorize and perform the national anthem for Mexico,” he said. “I just think it’s so backwards.”

...said one comment among many that said that Chinese law had helped create a fear of intervening.

It is a story that has deeply unsettled millions in China, posing troubling questions about whether three decades of headlong economic development has left nothing but a moral vacuum in its wake.
It begins last Thursday when a two-year-old girl totters into a narrow lane in a wholesale market in the thriving industrial city of Foshan in Guangdong Province and is hit by a small, white van. The driver pauses, and then pulls away, crushing the child for a second time under his rear wheels.
It is not the accident itself, but what happens next — or rather doesn’t happen – that has left millions of ordinary Chinese wondering where their country is heading.
One by one, no fewer than 18 passers-by are seen on closed circuit television ignoring the girl as she lies, clearly visible in the road, haemorrhaging into the gutter. Not a single one of them stops to help.

The first is a young man in a white T-shirt and trainers. He walks on past the prone form of girl who is by now bleeding profusely, without a second glance.
Next comes a cyclist who wobbles slightly to avoid the dying child and then pedals on, turning his head back momentarily, as if to check he really did see a child dying in the street.
As the pool of blood spreads, a third pedestrian comes by, clearly sees the bleeding girl, but steps out into the small lane to give her a wide berth.
All three could have moved the girl, later named by her parents as 2-year-old Yueyue, but none did, allowing another, larger vehicle following down the lane a few minutes later to run her over for a second time.
The pictures of the incident which happened last Thursday afternoon then show a succession of other cyclists and rickshaw drivers weaving round the girl, including a woman walking with a child who on seeing Yueyue visibly quickens her step, dragging her charge after her.
It is only the nineteenth passer-by, a 58-year-old street cleaner called Chen Xianmei, who drops her bag of rubbish and rushes to the bleeding child, attempting to scoop up her up, but finding her floppy and lifeless.
Mrs Chen, who is only 4ft 7in tall, then calls for the girl’s mother who comes rushing into view, taking up her child in her arms, who is now in intensive care in the military hospital in the city of Guangzhou.
Yueyue remains in a critical condition, a nurse told The Daily Telegraph by phone. Earlier doctors said she had suffered major head injuries and was breathing only with the assistance of a ventilator The story of Yueyue was the leading item across China’s online news portals as the copies of the CCTV highly distressing footage attracted more than a million viewings in a number of hours.
Many viewers reacted with dismay, citing the incident as further evidence that China had become a “world without morals”.
“Everyone is praising the rubbish-collecting granny for helping, but isn’t it normal to help someone who is wounded or dying?”, asked Johnny Yao on Weibo, the Chinese equivalent of Twitter, “This just shows how abnormal is the moral situation in this society! The sad Chinese, poor China are we even rescuable?”
Others blamed China’s compensation culture for the apparent show of callousness, recalling a famous 2006 judgment when a Good Samaritan who helped a woman get to hospital was wrongly ordered to pay her compensation.
“They didn’t ignore the girl, they just didn’t dare help her,” said one comment among many that said that Chinese law had helped create a fear of intervening.
However many others said there could be no excuse, and that the scenes in the video should “shake the soul of every conscientious person” in China.
“Even if the passers-by couldn’t rescue her, they could dial 120 and 110 [China’s emergency numbers] and help to stop vehicles, then the little Yueyue wouldn’t have been run over by the second car,” said another comment posted by 'Dull Baby’.
“What’s up with people these days? They make so many excuses to turn a blind eye. The society is so indifferent, so heartless.” Yueyue’s father, a man surnamed Wang who was shown weeping with his wife on television news bulletins, said he didn’t want to enter the moral debate, only pray for his child’s survival.
“Yueyue is so lovely, often amuses us. Sometime if I quarrelled with her mother and if her mother cried, she would tell us not to cry, she always tried to amuse us. I don’t have any thoughts now, I just hope my child will wake up and call me Dad again.”

Magnificent Ronald and the Founding Fathers of al Qaeda

“These gentlemen are the moral equivalents of America’s founding fathers.” — Ronald Reagan while introducing the Mujahideen leaders to media on the White house lawns (1985). During Reagan’s 8 years in power, the CIA secretly sent billions of dollars of military aid to the mujahedeen in Afghanistan in a US-supported jihad against the Soviet Union. We repeated the insanity with ISIS against Syria.